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Cablegate: Nigeria: Dyncorp Notifies Akwa Ibom State

VZCZCXRO3980
PP RUEHMA RUEHPA
DE RUEHOS #0112 0851454
ZNR UUUUU ZZH
P 251454Z MAR 08
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC PRIORITY 9830
INFO RUEHZK/ECOWAS COLLECTIVE PRIORITY
RUEHUJA/AMEMBASSY ABUJA PRIORITY 9552
RUEHBS/AMEMBASSY BRUSSELS PRIORITY 0493
RUEHDK/AMEMBASSY DAKAR PRIORITY 0894
RUEHRO/AMEMBASSY ROME PRIORITY 1323
RULSDMK/DEPT OF TRANSPORTATION WASHDC PRIORITY

UNCLAS LAGOS 000112

SIPDIS

SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY
SIPDIS

STATE PASS FAA TO AHARRIS,
TRANSPORTATION TO FAA; STATE PLEASE PASS TO OPIC; DAKAR
PLEASE PASS TO FAA REP MOIRA KEANE; ROME PLEASE PASS TO TSA
REP JOHN HALINSKI

E.O. 12958: N/A
TAGS: EAIR EINV PREL NI
SUBJECT: NIGERIA: DYNCORP NOTIFIES AKWA IBOM STATE
GOVERNMENT OF INTENTION TO TERMINATE NATIONAL HANGER PROJECT


Sensitive But Unclassified; Business Proprietary Information;
Handle Accordingly

1. (SBU) Summary: Dyncorp International, a U.S. firm, has
notified Akwa Ibom State of its intention to terminate the
contract for construction of the state's international
airport and maintenance, repair and overhaul (MRO) facility;
the state government currently owes Dyncorp over USD 5.1
million. On March 7, Ambassador sent a letter to Akwa Ibom
State Governor Godswill Akpabio urging him to provide
consistent funding for the project. End Summary.

2. (SBU) Fred Bush, Director of Global Solutions for DynCorp
International and longtime proponent of the Akwa Ibom
National Hanger and International Airport project, told the
Consul General in a meeting February 29 that the state's
failure to pay USD 5.1 million resulted in DynCorp's
submittal of a notice of intent to terminate the project to
the government of Akwa Ibom State earlier that day. The
DynCorp project includes the new Akwa Ibom International
Airport, including runways, terminals and ultimately a
maintenance, repair and overhaul (MRO) facility for
commercial and military aircraft.

3. (SBU) The contract under which DynCorp operates in Nigeria
provides for fourteen days after notice of termination during
which the state government can rectify the problem. As of
March 6, DynCorp had been paid USD 2.6 million, but was still
owed USD 5.1 million. However, on March 7, Ambassador sent a
letter to Akwa Ibom Governor Godswill Akpabio urging him to
provide consistent funding for the project. (Note: As of
March 14, no response had been received. End Note.) DynCorp
lifted the notice of termination and staff returned to work
the weekend of March 7 after they received notice that money
had been wired into their account. On March 10, DynCorp
learned that two checks paid by the state to their
subcontractors as partial payment of the USD 5.1 million debt
had bounced. A third subcontractor check had bounced as of
March 13, diminishing hopes that the state would cure the
breach of contract with DynCorp. DynCorp has issued a notice
of intent to suspend work on March 25.

4. (SBU) DynCorp remains ready to perform under the contract
if the Government of Akwa Ibom provides payment. The company
has bid for the contract to run the airport and MRO
facilities, which are intended to service the entire Western
African region. The project, for which the contract was
signed in November 2005, was originally scheduled for
completion in March 2007.

5. (SBU) Comment: While there is genuine enthusiasm for U.S.
companies in Nigeria, and a recognized need for
infrastructure development, stories like this will continue
to give companies pause before committing to the country.
End Comment.

6. (U) This cable has been cleared by Embassy Abuja.
BLAIR

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